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Why no investment choice is the best choice

Intuitively, choice feels like a good thing, but when it comes to pension funds, choice can actually lead to poorer returns and will often drive up costs for members.

In the UK pensions market, the commonly held view is that it is in the interests of the members to offer a range of investment options, with the vast majority of workplace pension providers offering a multitude of funds.

But, despite all this choice, we know that more than 90% of savers who’ve been auto enrolled, haven’t made any active investment choice and have instead trusted the provider’s default fund. See full research findings.

When we entered the UK market, it was clear to us that savers wouldn’t have the appetite to make their own investment decisions. That’s why we went against the grain and decided to offer a single investment strategy – making us unique in the pensions marketplace.

This means members aren’t presented with complicated investment decisions and they can instead focus on the questions that will make the biggest difference to their future such as, when they want to retire, what sort of lifestyle they want in retirement and what contribution levels they will need to make to get there.

By keeping the investment approach simple, it’s easier for employers to communicate and workers tend to have fewer questions.